Collateral does not reduce the risk of a loan per se, because A. it is not part of the loan agreement B. the risk of a loan is determined by the borrower’s willingness and ability to repay the loan C. it may be worth less than the bank thinks D. the bank may not have title to the collateral

Collateral does not reduce the risk of a loan per se, because A. it is not part of the loan agreement B. the risk of a loan is determined by the borrower’s willingness and ability to repay the loan C. it may be worth less than the bank thinks D. the bank may not have title to the collateral

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Collateral does not reduce the risk of a loan per se, because
A. it is not part of the loan agreement
B. the risk of a loan is determined by the borrower’s willingness and ability to repay the loan
C. it may be worth less than the bank thinks
D. the bank may not have title to the collateral

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